Snapchat was valued at $800m by the funding round, despite the fact that the Los Angeles-based startup has yet to make any money by charging users or selling advertising.

Snapchat users set the duration for which their messages can be viewed after the recipient has opened them, between one and 10 seconds, and are warned if they take a screenshot.

The app has been particularly popular among teenagers, which has caused controversy amid reports that "sexting" – sending partially clothed or nude photos and videos – was a key use for Snapchat.

Those reports were somewhat overblown. While there is "sexting" taking place on Snapchat, its appeal to teenagers is more about privacy: ephemeral social networking that, in theory, leaves no public trace for parents and future employers to find.

"Under no circumstances is it okay to create, send, receive or save a sexually explicit image of a minor," warns Snapchat's guide for parents (PDF). "It is extremely important that Snapchat not be used in this manner and parents are strongly encouraged to educate their minor children on this subject."

Brands and media companies are also becoming interested in Snapchat. MTV UK has just announced that its Geordie Shore TV show will be distributing photos and videos to fans via Snapchat, while indie band The Naked And Famous are also Snapchatting from the recording sessions of their next album.

Snapchat has launched a way for even younger children to start using its app: a feature called SnapKidz that has made its debut in Snapchat's iPhone app.

Under-13s were previously barred from using Snapchat, although they could simply enter a false age when signing up to get around this ban.

Now they can use SnapKidz to capture and caption photos and videos before saving them to their device, but they can't send or receive snaps within the app or add friends.

IVP general partner Dennis Phelps explained in a blogpost that the funding round was "one of the most competitive financings we have been a part of in years", despite the fact that Snapchat currently has no revenues.

"The growth and engagement metrics are off the charts. Seldom have we seen a consumer application with this type of user momentum and excitement," he wrote. "Think Twitter ... Think Instagram … Think Pinterest … and Snapchat is just getting started."

Snapchat is planning to add in-app purchases in the coming months, according to chief executive Evan Spiegel. "We think we can build really cool stuff people want to pay for. The app is now a part of everyone's day-to-day lives. That means that they will – I at least would – pay for a more unique experience," he told tech blog TechCrunch.